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Do I qualify for the Idaho research activities credit?

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Question
Do I qualify for the Idaho research activities credit?

Answer

Form 67 is used to calculate the credit for Idaho research activities (Idaho research credit) earned or allowed.  The credit is earned by increasing research activities in Idaho.  Each member of a unitary group that earns or is allowed the credit must complete a separate Form 67.

Qualified Research The Idaho research credit conforms to the Internal Revenue Code (IRC) Section 41 definitions of basic research payments, basic research, qualified research expenses, and qualified research, except that only the amounts related to research conducted in Idaho qualify for the Idaho research credit. In general, in order for an activity to qualify for the research credit, "qualified research" must meet all four of these criteria:
 

● Expenditures may be treated as expenses under IRC section 174; ● Activities are undertaken for the purpose of discovering information which is technological in nature;

● The application must be useful in the development of a new or improved business component of the taxpayer; and

● Substantially all activities constitute elements of a process of experimentation for a qualified purpose.

Qualified research involves only technological activities and doesn't include research in economics, business management, behavioral sciences, arts, or humanities.

Gross receipt calculations include only those gross receipts that are attributable to Idaho using the multistate corporation apportionment rules.  These are referred to in the instructions as Idaho gross receipts.

The Idaho credit doesn't include the calculation of the alternative simplified credit, which is allowed in computing the federal credit. 

Unitary Sharing

A corporation included as a member of a unitary group of corporations may elect to share the Idaho research credit it earns but doesn't use with other members of the unitary group.  The corporation must claim the Idaho research credit to the extent allowable against its Idaho income tax before it can share the credit. Carryover Periods The credit carryover is limited to 14 tax years. Special Rules If you have a short tax year, see IRC Sections 41(f)(4) and 41(h).

 


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Article Details
Views: 243 Created on: Nov 29, 2017
Date updated: Jan 02, 2019
Posted in: States, Idaho

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